FEATURED ARTICLE Industrial Laser Sales Grow in a Slowing Global Economy BY DAVID A. BELFORTE
These are unsettled times for global manufacturing. Setting aside the normal up and down cycles of manufacturing — a number of global factors — ranging from Brexit concerns, to economic problems in China, turmoil in the mid-East and a new administration in Washington give cause for concern about economic growth prospects.
Trumping (pardon the pun) these concerns is the current status of industrial laser activity in the global manufacturing sector, that seemingly ignoring external effects, are enjoying another growth year (revenues up by more than 10 percent) led by strong double-digit sales of high-power fiber lasers, a surge in excimer laser revenues led by excimer laser silicon of displays and significant rises in uses for ultra-fast pulse lasers.
Fiber lasers at the kilowatt for metal cutting and joining operations, continue to outpace other laser types, representing 41 percent of the total industrial laser revenues in 2016. Fibers’
12 percent increase came, in part, at the expense of CO2 (-4 percent) and solid-state (-1 percent) lasers. On a percentage basis direct-diode and excimer lasers in our ‘Other’ category enjoyed the largest annual revenue gain (54 percent) in recent years. These lasers have been recording strong gains based on their limited base numbers in several of our last reports. But one application, excimer laser annealing of silicon (FPE) used in mobile phone displays caused one company, Coherent, Inc., to book multiple orders worth several hundred million dollars for system’s to be delivered into 2018.
The overall revenue growth for industrial lasers in 2016, estimated at slightly more than 10 percent, would in reality be more like 4 percent if we deduct the 2016 FPE revenues; leading to fiber lasers inexorable drive to 50 percent of total laser sales. US based IPG Photonics will have a record 2016 as their revenues from fiber lasers for nine months passed $726 million and, at the high end of guidance for the 4th
quarter, could
be pushing the $1 billion mark (admittedly not all revenues are generated by laser sales).
Joining IPG Photonics near the billion dollar level is Coherent, Inc., whose fiscal year closed in October at a bit more than $857 million, but strong excimer sales at the end of the year should assist them breaking the barrier (not all revenues are industrial laser related). Certainly after their merger with Rofin- Sinar they could be over the $1.5 billion.
6 LIATODAY FOCUS: YEAR END REVIEW NOVEMBER/DECEMBER 2016 Table 1. Revenues by laser type - Source: Strategies Unlimited
As stated earlier, and shown in the table above, 2016 was another growth year for
industrial lasers. In an otherwise
moribund global capital equipment market, laser system sales grew in industry sectors that continue to show strength: automotive, aerospace, energy, electronics and communications (smart phones). We divide lasers into three major categories: the first is marking, including engraving, that contributes about 18 percent of all laser revenues and, because this is the most global of all laser markets, traditionally has shown solid growth in all non-recessionary years, continues the trend with a 3.9 percent growth dominated by fiber lasers at 49 percent of the total.
The second category is Micro, which includes all applications using lasers with < 500 W of power, which in 2016 climbed to 35 percent of the total laser market thanks to a 10.2 percent growth in the sector that included display applications requiring excimer lasers.
Sitting atop the ‘billionaires’ club is industry giant Trumpf Group whose 2015/2016 approached the $2.8 billion mark, of this, laser technology (including some laser systems) alone topped a billion dollars.
The aforementioned is not intended to belittle a fine group of laser companies who also make up the industrial laser market, but it is these Big Three that dominate the news.
Ultra-fast pulse (UFP) lasers are gaining adherents in the Micro sector and this technology will shore up otherwise decreasing solid-state laser revenues.
The laser category Macro, that includes laser processes requiring more than 500 W of power, is the largest, at 47 percent, of all industrial laser revenues, thanks to fiber lasers which make up 44 percent of all Macro revenues. In 2016, CO2
lasers bore the
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